PGM outlook strengthens as supply tightens

March 3rd, 2026

The platinum group metals market is entering 2026 on a more bullish footing than many expected a year ago, driven by tightening supply and a recalibration of long-term demand concerns.

Speaking to African Mining, Incorporating Mining Mirror, Arnold van Graan, head of Research at Nedbank CIB, said the recent price rally largely reflects structural shifts and not just short-term speculation.

“The overall view is certainly more bullish than it was a year ago. PGM prices have risen substantially over the last few months and the key driver behind that is constrained supply,” he said. According to van Graan, the industry has underinvested in mine recapitalisation for more than a decade, following repeated commodity cycles that limited capital spending. That legacy is now feeding directly into future production risk.

“Our view is that supply at best could be flat for the next three years, and then we see it coming down,” he explained. “The only way to arrest that decline is for the industry to spend capital to recapitalise some of these mines.” This tightening supply picture is colliding with a demand outlook that has proven more resilient than previously forecast. For years, the dominant concern in the PGM market was the rapid growth of battery electric vehicles and the threat this posed to autocatalyst demand. That narrative has softened.

“What we’ve seen is that expectations for battery electric vehicle penetration have been tempered. Every year forecasts are pulled back, and the long-term result is that the market could demand more PGMs than previously expected,” said van Graan. In a market where supply is constrained and demand remains stronger than anticipated, he said, growing voices now expect meaningful deficits over the next five years.

“That’s what drives the fundamental side of the rally,” he said. Beyond fundamentals, broader macroeconomic dynamics are also playing a role. Volatility in global markets and a shift toward hard assets have supported precious metals, with PGMs beginning to attract attention alongside gold.

“There’s been a move away from the dollar and treasuries, with investors looking for alternative assets,” he said. “PGMs are starting to attract interest on the back of that.” From a South African perspective, he emphasised that policy certainty remains critical to unlocking investment. While this is a recurring theme at every Mining Indaba, he noted that recent improvements in energy stability and logistics are positive signals.

“We’ve seen a big turnaround at Eskom, which has been a positive for producers. We’ve also seen improvements in logistics and rail,” he said. “We need to continue on that trajectory to maintain an investment climate that attracts capital.” Investor appetite, he added, is returning as the long-term outlook stabilises.

“For some time, there was a question mark around the long-term prospects of PGMs because of EV risk,” he explained. “With that being tempered, there is renewed interest in the sector.” A further catalyst is the global geopolitical shift toward securing critical mineral supply chains. PGMs feature prominently in strategic resource discussions, attracting attention from investors who historically may not have participated in the sector.

“We’re seeing a new category of investor entering the space,” van Graan said. “Sovereign and strategic funds are looking at metals in a way they didn’t before. That’s quite positive.” PGMs also retain a role in the energy transition, particularly in hydrogen and fuel cell technologies, although he cautioned that this market evolves in cycles of enthusiasm and consolidation.

Looking ahead, he said confidence ultimately rests on two pillars. “Investors need policy certainty and solid fundamentals. And the supply-demand fundamentals for PGMs are quite positive on a three, five and even ten-year basis.” For producers navigating tighter supply conditions, capital allocation will require discipline. “It’s always about striking a balance between reinvesting in ore bodies and returning cash to shareholders,” van Graan said. “The key message is don’t overdo it in the good times.”

Source: African Mining